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Sharika Enterprises Ltd.

BSE: 540786 Sector: Others
NSE: N.A. ISIN Code: INE669Y01014
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NSE 05:30 | 01 Jan Sharika Enterprises Ltd
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VOLUME 3000
52-Week high 49.80
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P/E 39.02
Mkt Cap.(Rs cr) 35
Buy Price 33.00
Buy Qty 3000.00
Sell Price 35.00
Sell Qty 3000.00
OPEN 32.00
CLOSE 32.00
VOLUME 3000
52-Week high 49.80
52-Week low 25.50
P/E 39.02
Mkt Cap.(Rs cr) 35
Buy Price 33.00
Buy Qty 3000.00
Sell Price 35.00
Sell Qty 3000.00

Sharika Enterprises Ltd. (SHARIKAENTERPR) - Director Report

Company director report

To the Members of Sharika Enterprises Limited

The Directors have pleasure in presenting the 20th Annual Report of yourCompany together with its audited financial statement for the financial year ended March31 2018.

FINANCIAL RESULT:

STANDALONE (in Rs.)

Particulars 2017-18 2016-17
Total Income 192339169.00 187815823.00
Total Expenditure 163201138.00 152540410.00
Profit/ (Loss) before Tax 29138031.00 35275413.00
Profit/ (Loss) after Tax 22676115.00 22310 156.00

CONSOLIDATED (in Rs.)

Particulars 2017-18 2016-17
Total Income 194480809.00 235256905.00
Total Expenditure 174171192.00 201732969.00
Profit/ (Loss) before Tax 20309617.00 33523936.00
Profit/ (Loss) after Tax 13847701.00 26075444.00

FINANCIAL HIGHLIGHTS- STANDALONE:

Income:

The Total Income for the year ended March 31 2018 is Rs. 365959.00 more than TotalIncome of the previous year.

Depreciation and Finance Costs:

Depreciation for the year is higher at Rs. 6198461.00 which is higher by Rs.2489063.00 as compared to previous year due to purchase of Assets worth Rs. 4341765.00during the year. Total Finance costs for the year ended March 31 2018 was Rs.15498958.00 which is higher by Rs. 7457475.00 as compared to previous year due tohigher interest on borrowing fund.

Profit before Tax and Exceptional Items:

Profit before Tax stood at Rs. 29138031.00 as compared to previous year Rs.35275413.00.

Borrowings:

The total borrowings stood at Rs. 82052596.00 as on March 31 2018 as against Rs.8.65.51.934.00 as on March 31 2017 for the standalone entity.

Profit / (Loss) after tax:

The Profit after Tax for the year is at Rs. 22676115.00 as compared to a profit ofRs. 2.23.10.156.00 for the previous year.

FINANCIAL HIGHLIGHTS - CONSOLIDATED

The consolidated income of your Company for the year ended March 31 2018 aggregatedRs. 19.44.80.809.00 as against for the previous year Rs. 235256906.00. The consolidatedturnover decreased by 17.33 %.

The consolidated profit after Tax aggregated to Rs. 13847701.00 for the year hasdeclined when compared to the profit after Tax of Rs. 26075444.00 for the previousyear. The consolidated financial results of the current year were impacted due to variousoperational factors.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

The Consolidated Financial Statements of your Company and its Subsidiary and JointVenture prepared in accordance with the relevant Accounting Standards of the Institute ofChartered Accountants of India duly audited by the Statutory Auditors form a part of theAnnual Report and are reflected in the Consolidated Accounts.

Your Company has one Subsidiary and one Joint Venture as at March 31 2018. Pursuant tothe provisions of Section 129(3) of the Act a statement containing salient features ofthe financial statements of your Company's Subsidiary and Joint Ventures in Form AOC-1 isattached to the Financial Statements of your Company.

PERFORMANCE OVERVIEW AND STATE OF COMPANY'S AFFAIRS:

During the year under review your Company has earned net profit of Rs. 22676115.00.Your directors are hopeful for the bright future of the company in years to come. Thecompany will continue its efforts to reduce costs and improve efficiencies enhancevalue-addition to its customer base and maximize capacity utilization. With these effortsthe company hopes to generate revenues and profitability.

NATURE OF BUSINESS:

Incorporated in 1998 Our Company engaged in Engineering Procurement Construction (EPC)contracts specialized assembling trading activities Erection Services representationservices to majorly power Generation Transmission and Distribution sector. We have grownconsistently over the years and widened our portfolio which covers installing powertransmission EHV cables designing & installing EMS (Energy Management System) andallied distribution automation Equipments such as Autoreclosers fault passage indicators(FPI) etc. designing and installing of Solar Power Generation plants.

Our Company is headquartered in the National Capital Region in India and with havingassembling unit in Jammu and Noida. Also our Company is an ISO 9001:2015 certified forproviding Consultancy Project Management EPC Contracts in field of Power GenerationTransmission and Distribution. We operate in the infrastructure sphere in India focusingon the power sector and work with international and Indian power equipment manufacturersand involved in project management/EPC contractors.

Our Company is also engaged in trading of LED lights EHV cables & accessoriespower capacitors switchgears & Cast Resin Transformers.

Our Services are:-

1. Engineering Procurement Constructions (EPC)

2. Representative Services

3. Other consultancy Services

CHANGE IN THE NATURE OF BUSINESS IF ANY

During the year there is no change in the nature of business activity of the company.

DEMATERIALIZATION OF EQUITY SHARES:

All the Equity Shares of the Company are in dematerialized form with either of thedepositories viz. NSDL and CDSL.

ANNUAL RETURN:

The details forming part of the Annual Return shall also be available on Website of theCompany which is www.sharikaindia.com

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India and approved by the Central Government underSection 118(10) of the Act.

APPROPRIATIONS:

Dividend:

No dividend was declared during financial year under review.

Reserves:

The Board of director has not transferred any amount to Reserves.

LISTING:

The Equity Shares of the Company are listed on SME Platform of BSE Limited w.e.f. 27thNovember 2017. The Company is regular in payment of Annual Listing Fees. The Company haspaid Listing fees up to the year 2017-18.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF FINANCIAL YEAR AND DATE OF REPORT:

Your Company M/s Sharika Enterprises Limited has received LOI for Solar Street LightProject worth Rs. 40.33 Crores (approx) from one of the State Government's renewableenergy agency which might affect the financial position of the company between the end ofthe financial year to the date of signing of financial statement and directors' report.

Besides that Mr. Rajinder Khazanchi (Independent Director) resigned after the end ofrelevant year on 17.05.2018 Mr. Mahesh Pandey (Company Secretary & ComplianceOfficer) resigned after the end of relevant year on 26.06.2018 while Mr. Ranjeet Verma andMs. Pinki Kumari was appointed as Independent Director after the end of relevant year on14.08.2018 which might affect the financial position of the company between the end of thefinancial year to the date of signing of financial statement and directors' report.

PUBLIC DEPOSITS:

Company does not accept and / or renew Fixed Deposits from the general public andshareholders.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The company has given loan during the financial year 2017-18 the details of which arespecified in Note No. 18 of financial statement as on 31st March 2018.

The company has neither made any investment nor given any guarantee during thefinancial year 2017-18.

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

The Initial Authorised share capital of our Company was Rs. 10.00 Lakh divided into100000 Equity Shares of Rs. 10/- each. This Authorised capital was increased to Rs.1100.00 Lakh divided into 11000000 Equity Shares of Rs. 10/- each pursuant to aresolution passed by our Shareholders during the year 2017-18 in their extra-ordinarygeneral meeting held on July 28 2017.

7500000 Equity Shares were issued on 8th August 2017 as Bonus issue while3225000 Equity Shares in terms of Draft Prospectus were issued by a resolution of ourBoard of Directors dated August 22 2017 and by special resolution passed under Section62(1)(c) of the Companies Act 2013 at the Extra Ordinary General Meeting of the membersheld on August 26 2017.

BOARD POLICIES

The details of all the policies approved and adopted by the Board are available on thewebsite of the Company www.sharikaindia.com . You can also access them directly via thislink http://www.sharikaindia.com/policy.php

Policy on directors' appointment and remuneration

The current policy is to have an appropriate mix of executive non-executive andindependent directors to maintain the independence of the Board and separate itsfunctions of governance and management. As of March 31 2018 Our Board of Directorsconsists of 7 (seven) Directors out of which 3 (three) are Executive Directors 2(two) areNon-Executive Women Directors and 2 (two) are Independent Directors.

The policy of the Company on directors' appointment and remuneration including thecriteria for determining qualifications positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available on our website at www.sharikaindia.com . You can access it directlyvia this link too http://www.sharikaindia.com/policy.php

We affirm that the remuneration paid to the directors is as per the terms laid out inthe Nomination and Remuneration Policy of the Company.

DETAILS OF REMUNERATION TO DIRECTORS

The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:

Sr. No. Name Designation %age increase
1. Aran Kaul Whole-time director 41%
2. Ravinder Bhan Whole-time director 41%
3. Rajinder Kaul Managing Director 41%
5. Vikas Pandey CFO 52%

Reason for increase in the remuneration of employees in the financial year:

The remuneration has been increased with reference to their expertise their experienceand their contribution in taking the Company forward.

The number of permanent employees on the rolls of company:

There are approximately 82 permanent employees in the Company.

If remuneration is as per the remuneration policy of the company:

We affirm that the remuneration is given to all as per remuneration policy of theCompany.

Ratio of remuneration of highest paid director to other employees who get remunerationmore than highest paid director.

There is no employee who gets higher remuneration than the Directors of the Company

No employee of the Company was in receipt of remuneration exceeding the limitsprescribed under rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

AUDITOR AND AUDITOR'S REPORT:

Statutory Auditor:

M/s WDK & Associates Chartered Accountants was appointed as StatutoryAuditors of the Company at 16th Annual General Meeting of the Company to holdoffice for five consecutive years subject to ratification at every annual general meeting.Finding satisfactory performance of auditor Board on the recommendation of AuditCommittee recommends ratification of the appointment of M/s WDK & Associates asStatutory Auditors.

Statutory Auditor's Report: The Auditors' Report does not contain any qualificationreservation or adverse remark and report are self-explanatory and do not call for anyfurther comments.

Secretarial Auditor:

M/s Kundan Agrawal & Associates Company Secretaries was appointed asSecretarial Auditor of the Company by the Board of Directors w.e.f. 30th May 2018 for theFinancial Year 2017-18.

As the Company recently got listed at BSE SME Exchange thus Company appointedSecretarial Auditor for the first time.

The Auditors' Report does not contain any qualification reservation or adverse remarkand report are self-explanatory and do not call for any further comments.

Secretarial Auditor's Report: The Auditors' Report does not contain any qualificationreservation or adverse remark and report are self-explanatory and do not call for anyfurther comments.

The report of Secretarial Audit in Form MR -3 is annexed to & forms part of thisReport.

Internal Auditor:

Mr. Ravinder Bhan was appointed as Internal Auditor of the Company for the financialyear 2017-18 who is acting independently. He reports directly to the Board.

Internal Auditor's Report: The Auditors' Report does not contain any qualificationreservation or adverse remark and report are self-explanatory and do not call for anyfurther comments.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions of Companies Act 2013 w.r.t. CSR are not applicable on the Company DIRECTORS'RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3) (c) of the Companies Act 2013 the Board of Directorshereby state and confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March2018 the applicable accounting standards have been followed along with proper explanationrelating to material departures;

b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at 31st March 2018 and of the profit andloss of the company from 1st April 2017 to 31st March 2018.

c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) the Directors had prepared the annual accounts on a going concern basis; and

e) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY TRANSACTIONS:

Transactions with related parties in the ordinary course of the Company's business andnone of these fall under the purview of the provisions of section 188 of the CompaniesAct 2013. The details of RPT are more fully explained in Note No. 30 of FinancialStatements.

The policy on Related Party Transactions is available on our Websitewww.sharikaindia.com . You can access it directly via this link toohttp://www.sharikaindia.com/policy.php

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. Conservation of Energy-

i. the steps taken or impact on conservation of energy; Nil

ii. the steps taken by the company for utilizing alternate sources of energy; Nil

iii. the capital investment on energy conservation equipments; Nil

B. Technology Adsorption-

i. the efforts made towards technology absorption-Nil

ii. the benefits derived like product improvement cost reduction product developmentor import substitution- Nil

iii. in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)- Nil

iv. the expenditure incurred on Research and Development- Nil

C. Foreign Exchange Earnings and Outgo: Nil

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013 READ WITH RULES:

The Company has not received any complaint of sexual harassment during the year underreview.

SIGNIFICANT AND MATERIAL ORDERS OF REGULATORS OR COURTS OR TRIBUNALS:

A significant material order was passed by Bombay Stock Exchange (Stock MarketRegulator) declaring your Company M/s Sharika Enterprises Limited as Listed Company on 27thNovember 2017. The Company made its Initial Public Offer in November 2017 and met withover whelming response wherein the public offering was oversubscribed by more than 59times.

Besides this Registrar of Companies passed order for change of Registered Office ofCompany from 404 CHIRANJIV TOWER 43 NEHRU PLACE NEW DELHI - 110019 to 208 CHIRANJIVTOWER 43 NEHRU PLACE NEW DELHI - 110019 w.e.f. 27.02.2018 upon application made byCompany in this regard.

Company's status has been changed from Private Limited to Public Limited and inconsequence thereof the name of the Company has changed from Sharika Enterprises PrivateLimited to Sharika Enterprises Limited.

There are no other significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and Company's operations in future.

COROPRATE GOVERNANCE

As per Regulation 15 under Chapter IV of SEBI (LODR) Regulations 2015 the listedentity which has listed its securities on the SME exchange are exempt from complying withthe Corporate Governance provisions as specified in Regulation 17 18 19 20 21 22 2324 25 26 27 and sub-regulation 2 of Regulation 46.

Your Company has been listed on SME Platform of Bombay Stock Exchange and thusprovisions of Corporate Governance are not applicable on your Company. Though yourCompany tries to follow all the corporate governance practices as much as it can. Thusseparate Corporate Governance Report is not provided this year however Company isproviding Management Discussion & Analysis report which forms a part of this Annualreport.

Board diversity

The Company recognizes and embraces the importance of a diverse board in its success.We believe that a truly diverse board will leverage differences in thought perspectiveknowledge skill regional and industry experience cultural and geographical backgroundage ethnicity race and gender that will help us retain our competitive advantage.

Our Board has been constituted in compliance with the Companies Act and the SEBIListing Regulations and in accordance with the best practices in Corporate Governance.

Declaration by independent directors

The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he / she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofthe Listing Regulations.

Board evaluation

The Companies Act 2013 provides that a formal annual evaluation needs to be made bythe Board of its own performance and that of its Committees and individual directors.Schedule IV of the Companies Act 2013 states that the performance evaluation ofIndependent Directors shall be done by the entire Board of Directors excluding thedirector being evaluated.

The board of directors in consultation with Nomination & Remuneration Committee hascarried out an annual evaluation of its own performance Board Committees and individualdirectors pursuant to the provisions of the Companies Act 2013.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of committeeseffectiveness of Committee meetings etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and Committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.

The evaluation of Independent Directors was carried out by the entire Board and that ofthe Chairman and Non - Independent Directors were carried out by the IndependentDirectors.

In a separate meeting of Independent Directors performance of non-IndependentDirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual directors was also discussed.

The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.

Familiarization program for independent directors

All new independent directors inducted into the Board attend an orientation program.Further at the time of the appointment of an independent director the Company issues aformal letter of appointment outlining his / her role function duties andresponsibilities. The terms and conditions of appointment of Independent Director andFamiliarization Program for independent directors are available on our website atwww.sharikaindia.com . You can access them directly via this link toohttp://www.sharikaindia.com/policy.php .

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Appointments

Mr. Ashok Kumar Kaul was appointed as Independent Director during the year on26.08.2017. Mr. Vikas Pandey was appointed as CFO (KMP) during the year on 22.08.2017.

However Mr. Ranjeet Verma Kumar and Ms. Pinki Kumari were appointed as IndependentDirectors after the end of relevant year on 14.08.2018.

Resignations

Mr. Ravinder Bhan retired by Rotation but being eligible offers himself forre-appointment.

Mr. Rajinder Khazanchi (Independent Director) resigned after the end of relevant yearon 17.05.2018.

Mr. Mahesh Pandey (Company Secretary & Compliance Officer) resigned after the endof relevant year on 26.06.2018.

MEETINGS OF THE BOARD AND COMMITTEES:

Meeting of the Board

During the year 2017-18 Eleven board meetings were held on respective date 10thMay 2017 3rd July 2017 19th July 2017 8th August2017 22nd August 2017 30th August 2017 22nd September2017 29th September 2017 13th October 2017 23rdNovember 2017 and 17th February 2018. The attendance of directors at theboard meetings is as given below:

Name of Directors Designation

Attendance Particulars Number of Board Meetings

Held Attended
Mr. Rajinder Kaul Managing Director 11 11
Mr. Ravinder Bhan Whole-time Director 11 11
Mr. Arun Kaul Whole-time Director 11 11
Ms. Mukta Mani Kaul Non-Executive Director 11 8
Mr. ASHOK KUMAR KAUL Independent Director 6 6
Mr. RAJINDER KHAZANCHI Independent Director 6 6

Meetings of Audit Committee:

During the year 2017-18 One Audit Committee meeting was held on 13thOctober 2017. The attendance of directors at the Audit Committee meeting is as givenbelow:

Name of Directors Designation

Attendance Particulars Number of Board Meetings

Held Attended
Mr. RAJINDER KAUL Member 1 1
Mr. ASHOK KUMAR KAUL Member 1 1
Mr. RAJINDER KHAZANCHI Chairman 1 1

Meetings of Nomination & Remuneration Committee:

During the year 2017-18 One Nomination & Remuneration Committee meeting was heldon 13th October 2017. The attendance of directors at the Nomination &Remuneration Committee meeting is as given below:

Name of Directors Designation

Attendance Particulars Number of Board Meetings

Held Attended
Mrs. MUKTA MANI KAUL Member 1 1
Mr. ASHOK KUMAR KAUL Chairman 1 1
Mr. RAJINDER KHAZANCHI Member 1 1

Meetings of Stakeholder Relationship Committee:

During the year 2017-18 no Stakeholder Relationship Committee meeting was held.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofits assets prevention and detection of fraud error reporting mechanisms accuracy andcompleteness of the accounting records and timely preparation of reliable financialdisclosures.

There is adequacy of control w.r.t. Financial statements of the Company

WHISTLE BLOWER POLICY AND VIGIL MECHANISM

Your Company has established a "Whistle Blower Policy" and Vigil Mechanismfor directors and employees to report to the appropriate authorities concerns about theunethical behavior actual or suspected fraud or violation of the Company's code ofconduct policy and provides safeguards against victimization of employees who avail themechanism and also provide for direct access to the Chairman of the Audit Committee. Thesaid policy has been uploaded on the website of the company www.sharikaindia.com . You cansee it directly via this link http://www.sharikaindia.com/img/pdf/vigil-mechanism.pdf

CODE OF CONDUCT

Company keenly follows the code of conduct and ethics. The code of conduct of ourCompany is given on our Website www.sharikaindia.com . You can directly access the code ofconduct via this link too http://www.sharikaindia.com/policy.php

RISK MANAGEMENT

The Company has adequate internal control systems and procedures to combat the risk.The Risk management procedures are reviewed by the Audit Committee and Board of Directorson time to time basis.

ACKNOWLEDGEMENT:

Your Directors are pleased to record their gratitude for the understanding and supportreceived from the share holders financial institutions bankers customers and suppliersof the Company.

For SHARIKA ENTERPRISES LIMITED

Sd/- Sd/-
(Rajinder Kaul) (Ravinder Bhan)
Date: 01/09/2018 Managing Director Director
Place: Delhi DIN: 01609805 DIN:01609915
Add: T C-581 Sarita Vihar Add: A-581 Pocket-A
New Delhi 110044 Sarita Vihar New Delhi 110076